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Australian Energy Producers Journal Australian Energy Producers Journal Society
Journal of Australian Energy Producers
RESEARCH ARTICLE (Non peer reviewed)

Meeting demand in a new era of east coast gas supply

Will Pulsford
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Poten and Partners, 9 Havelock Street, West Perth, WA 6005, Australia. Email: wpulsford@poten.com

The APPEA Journal 59(2) 686-689 https://doi.org/10.1071/AJ18045
Accepted: 16 April 2019   Published: 17 June 2019

Abstract

Historically LNG projects have been established to monetise large gas finds in remote areas with little existing gas demand. The development of gas supply to the LNG project generally stimulated demand growth in the domestic gas market. As the supplying fields depleted, the LNG projects faced competition with domestic producers for declining gas supplies, but this was late in the project life when LNG plant capital had already been recovered. Recently, LNG export projects have been established within existing mature gas markets, most notably in Australia and North America. These plants now face competition with domestic gas consumers for access to feed gas from the beginning of their operational life when strong revenue has the greatest impact on the return earned on capital invested, with the greatest stress felt in Australia. This paper considers the underlying causes of domestic price rises experienced in Australia following the start-up of LNG export supplied from gas fields linked to the domestic market and the response by both plant developers/operators and the government. This historical view is used to inform forecasts of how the east coast gas market will react to the interplay between domestic and LNG plant demand, declining Bass Strait production, maturing CSG operations, LNG imports and completion of the Northern Gas Pipeline. In particular the ability of gas supply and pipeline capacity to meet the strongly seasonal domestic demand in Victoria and to a lesser extent NSW will be examined, together with the linkage to counter-cyclical seasonal demand for LNG from the Queensland LNG export plants in the key north Asian markets.

Keywords: coal seam gas, domestic gas, east coast gas market, LNG, LNG import, shale gas.

Will Pulsford is Manager, Natural Gas and LNG Consulting at Poten and Partners. Will began his career in 1989 with major upstream operators including Shell, Woodside and Chevron where he gained a solid grounding in upstream oil and gas development and production and LNG export and import projects. He has held roles in technical, commercial and managerial positions on both onshore and offshore oil and gas fields in Europe and Asia Pacific including the North West Shelf, Browse Basin, Gorgon and Bass Strait. In 2006, Will moved into advisory consulting initially with RISC as Partner and CEO and subsequently as global upstream lead and Asia Pacific consulting manager with Poten and Partners. Will holds a Master’s in Engineering Science from Oxford University, is a Chartered member of the Institute of Mechanical Engineers and Engineers Australia and a graduate of the Australian Institute of Company Directors.


References

Australian Energy Market Operator (AEMO) (2018). 2018 Gas Statement of Opportunities. AEMO. Available at https://www.aemo.com.au/Gas/National-planning-and-forecasting/Gas-Statement-of-Opportunities/2018-Gas-Statement-of-Opportunities [Verified 1 May 2019].